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Hoquiam expects boon with biodiesel opening

HOQUIAM - Thousands of gallons of canola-based biodiesel will flow daily from a new plant here, bringing hope for the economic resurgence of a region that has faced tough times after a decline in the timber industry.

The Imperium Renewables plant, which officially opens today, will produce 100 million gallons a year by the end of this year, using not only canola, but soy and other crops, company officials say.

"Obviously we think it's the wave of the future," said Martin Tobias, CEO of Seattle-based Imperium Renewables. "We are adding roughly 30 percent to the United States capacity in one fell swoop."

Last year, national biodiesel production was 250 million gallons, more than triple the production just the year before, according to the Missouri-based National Biodiesel Board. By the end of the year, that number is expected to climb to between 300 million and 350 million gallons.

According to the national biodiesel group and the state Department of Agriculture, there are a handful of other biodiesel production sites in the state, but at a much lower capacity.

Nationally, there are about 150 plants in the country, and nearly 100 more under construction or expanding.

Biodiesel is clean-burning fuel made with renewable resources, such as vegetable oils, and can be used in diesel engines alone or in mixtures with petroleum-based diesel.

The newest plant is on 12 acres of land at the Port of Grays Harbor, between Aberdeen and Hoquiam in southwest Washington. It's right next to a wood chipping facility, a sign of the changing times in this area.

"For 10 plus years, the mantra for economic development in this area has been diversification," said Gary Nelson, executive director of the Port of Grays Harbor. "We need not to be quite so dependent on the woods product industry. This offers us a great opportunity to not only diversify into a new industry, but an incredible private investment in infrastructure here to provide a sustainable alternative fuel."

The area was hit hard by the 2005 closure of a Weyerhaeuser large-log sawmill that cost 97 people their jobs. The company's nearby Cosmopolis pulp mill closed last year, displacing 245 workers.

The $75 million biodiesel plant created 250-350 jobs during its nine-month construction, and the current 50 full-time jobs will eventually grow to 60, company officials said.

"It's a major piece of economic development for the state of Washington and for the region," Tobias said. "It's possible to protect the environment and create jobs as well."

Imperium Renewables is the parent company of Seattle Biodiesel, which produces 5 million gallons of biodiesel a year out of a plant in Seattle.

The new plant has already received about 9 million gallons of canola oil from Canada, and Tobias said the company would likely contract with farmers in other states, and other countries for a variety of crops.

"It just depends on what the best opportunities are at the time," he said.

Washington farmers have been reluctant to convert a large percentage of their fields to canola because they are making good money selling wheat. But they are watching the biodiesel industry closely.

"There's no question about the market available for it," said Tom Mick, CEO of the Washington Wheat Commission in Spokane. "The question is, will these people put a contract to the farmers that makes it affordable to raise?"

Imperium has already contracted with a Yakima Valley farmer for 1 million gallons of canola oil. Natural Selection Farms of Sunnyside has delivered 250,000 gallons of canola oil to the biodiesel company so far.

Ted Durfey, the farm's owner, said there's money to be made in the industry, and local farmers can benefit from that money going to them instead of out of state, or out of the country.

"We're locally trying to build an industry," Durfey said. "If we can keep those dollars here in our rural community, we can enhance our rural economies."

The demand for alternative fuels is expected to increase as drivers face higher gasoline prices at the pumps.

Last year, lawmakers made Washington state only the second state in the country with biofuel and biodiesel mandates, to be implemented by December 2008. Budget writers also designated millions of dollars for biofuel low-interest loan programs to plant the seeds for the production, refining and infrastructure for alternative fuels.

"Not only can we create our own economic independence, but we can create the opportunity for us to have another exportable product from our state," Gov. Chris Gregoire said this week.

Imperium is looking to build three additional plants, Tobias said, and is looking at sites in Hawaii, Philadelphia and Argentina. All would have capacity of 100 million gallons a year.

How vegetable oil becomes biodiesel

HOQUIAM, Wash. (AP) - Here is how biodiesel is produced at the new Imperium Renewables plant at the Port of Grays Harbor:

-Vegetable oil arrives either by rail, barge or tanker at the Port of Grays Harbor and is loaded through pipes into holding tanks that are 80 feet in diameter and stand 65 feet tall. Each of the 8 tanks can hold up to 2 million gallons of either incoming vegetable oil or outgoing biodiesel. The facility is able to make biodiesel out of a number of different vegetable oils, including canola and soy.

-The oil then goes through its reaction process, where the oil is mixed with methanol and a catalyst to create biodiesel and glycerin. The glycerin is pulled out and stored to be sold separately. The remaining biodiesel then goes through another reaction, where more methanol and catalyst are added.

-From there, the oil goes though a decanter, and comes out a light yellow color. After it goes through another heating process to flash off the excessive methanol, the color is clear.

-The entire process is operated from a control room that directs and monitors nearly all of the processes.

-The biodiesel is then stored until it is shipped off either by train, truck or boat.

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